Legal Research AI

Miller v. Potomac Hospital Foundation

Court: Court of Appeals of Virginia
Date filed: 2007-12-11
Citations: 653 S.E.2d 592, 50 Va. App. 674
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                              COURT OF APPEALS OF VIRGINIA


Present: Judges Frank, Clements and Senior Judge Coleman
Argued at Richmond, Virginia


NANCY J. MILLER
                                                                       OPINION BY
v.      Record No. 0751-07-2                                      JUDGE ROBERT P. FRANK
                                                                    DECEMBER 11, 2007
POTOMAC HOSPITAL FOUNDATION AND
 RECIPROCAL OF AMERICA/VIRGINIA
 PROPERTY & CASUALTY INSURANCE
 GUARANTY ASSOCIATION


            FROM THE VIRGINIA WORKERS’ COMPENSATION COMMISSION

                Wesley G. Marshall for appellant.

                Bryan J. Olmos (Joseph F. Giordano; Semmes, Bowen & Semmes,
                on brief), for appellees.


        Nancy J. Miller (claimant) appeals a decision of the Workers’ Compensation Commission

(commission), arguing that the commission erred (1) in finding that the deputy commissioner did

not have the jurisdiction to order the Virginia Property & Casualty Insurance Guaranty Association

(Guaranty Fund) to make payment to a medical provider when payment was already made by a

third-party insurer, (2) in invoking the doctrine of imposition to reverse a final opinion of the deputy

commissioner that was not appealed by Potomac Hospital Foundation (employer) or the Guaranty

Fund, and (3) in finding that penalties could not be assessed against the Guaranty Fund. For the

following reasons, we reverse the decision of the commission and remand this case to the

commission for further proceedings consistent with this opinion.
                                         BACKGROUND

       Claimant suffered a compensable injury to her back on March 24, 2002. On July 22,

2005, the commission affirmed the deputy commissioner’s award of medical benefits and

temporary total disability benefits to claimant.

       In 2006, claimant filed several applications for reimbursement of her out-of-pocket

medical expenditures, including co-payments and prescriptions, and for payment of her treating

physician, Dr. Cindy Zhang, in the amount of $95,030. That amount covered claimant’s

treatments over a four-year period beginning in June 2002.

       A hearing on these claims took place before the deputy commissioner on May 11, 2006.

At the hearing, the Guaranty Fund argued that, because claimant’s private health insurance paid

the claims from Dr. Zhang, it was not the Guaranty Fund’s responsibility to make further

payment. 1 The Guaranty Fund acknowledged that Dr. Zhang was treating claimant for her

compensable injury.

       On June 27, 2006, the deputy commissioner issued an opinion ordering employer and/or

the Guaranty Fund to “attempt” to pay Dr. Zhang for claimant’s treatments, 2 in the amount of



       1
          There is some discrepancy in the record as to exactly how much money was still
outstanding on claimant’s account with Dr. Zhang, or exactly how much money medical
insurance paid to Dr. Zhang. Based on our holding today, however, these factual discrepancies
are not relevant.
       2
          The deputy commissioner ordered the Guaranty Fund to “attempt” to pay Dr. Zhang
based on a prior opinion of the commission, Parham v. J.P. Distributing, VWC File No.
195-39-78 (August 20, 2004). There, claimant had received treatment related to his compensable
injury from two health care providers. The cost of these treatments had been paid by claimant’s
private health insurance, and no balance was outstanding. The commission ordered insurer to
“attempt to make payments” to these providers, as this was the “logical solution to a situation
where the insurer will be essentially making double payments.” The commission reasoned that
“the private health insurer’s payments do not absolve the workers’ compensation insurer of its
responsibility,” and the commission could not concern itself with whether the providers would
accept insurer’s payment and reimburse the private health insurer. The deputy commissioner in
the instant case essentially adopted the reasoning in Parham in ordering the Guaranty Fund to
attempt to pay Dr. Zhang.
                                                -2-
$95,030, though these payments had already been made by claimant’s private health insurance. 3

The deputy commissioner reasoned that, while the medical provider may be receiving a double

payment, it remained the Guaranty Fund’s responsibility to pay for these treatments. Whether

the medical provider reimburses the private health insurer after receiving payment from the

Guaranty Fund, or rejects the Guaranty Fund’s payment because it has already received payment,

were “issues that the Commission cannot order or enforce.”

       The Guaranty Fund had 20 days to appeal the decision by filing a request for review with

the commission. The Guaranty Fund did not do so, nor did it pay Dr. Zhang. Instead, on July

20, 2006, the Guaranty Fund sent Dr. Zhang a letter requesting health insurance claim forms and

“an invoice indicating payments are due in this matter.” The letter further informed Dr. Zhang

that “all bills . . . will be reviewed to determine that the procedures are both reasonable and

necessary . . . and that the charges are of the usual, customary and reasonable fees specific to

[Dr. Zhang’s] geographic area.” The Guaranty Fund promised payment “upon receipt of this

information.” The Guaranty Fund did not send a copy of this letter to claimant.

       On August 14, 2006, claimant requested the commission to issue a show cause against

the Guaranty Fund for failing to attempt to pay Dr. Zhang in compliance with the June 27, 2006

opinion. Claimant also requested that the commission assess against the Guaranty Fund her

attorney’s fees and costs in her attempts to enforce the order. The commission sent a letter

August 22, 2006, giving the Guaranty Fund seven days to respond before the commission ruled

on the show cause request.

       The Guaranty Fund responded, stating that it had not received a reply from Dr. Zhang to

their July 20, 2006 letter. After the delay in waiting for a response, the Guaranty Fund used the


       3
         The deputy commissioner’s opinion also ordered the Guaranty Fund to pay claimant for
various out-of-pocket medical expenses. However, these payments are not before us on appeal.

                                                -3-
health care insurance forms claimant had submitted at the May 11, 2006 hearing, and had

submitted these forms within their office for “bill review” on a “rush” status. The Guaranty

Fund also suggested that part of the delay was attributable to the departure of the initial adjuster

from the Guaranty Fund’s employment. The Guaranty Fund maintained the position that they

were entitled to audit Dr. Zhang’s bills to ensure that they were consistent with the prevailing

local rate for similar treatment.

       On September 13, 2006, the deputy commissioner ruled that the Guaranty Fund’s

explanation was not “adequate to justify failure to comply with [the June 27, 2006] Opinion.”

Specifically, the deputy commissioner did not believe that the opinion allowed the Guaranty

Fund to conduct any “medical audit for usual, customary and reasonable treatment” before

paying Dr. Zhang’s bills. The deputy commissioner ordered the Guaranty Fund, pursuant to

Code § 65.2-713, 4 to “pay sanctions to claimant’s counsel for his repeated attempts to have the

[Guaranty] Fund abide by the Opinion.”




       4
           Code § 65.2-713 provides, in relevant part:

                A. If the Commission or any court before whom any proceedings
                are brought or defended by the employer or insurer under this title
                shall determine that such proceedings have been brought,
                prosecuted, or defended without reasonable grounds, it may assess
                against the employer or insurer who has so brought, prosecuted, or
                defended them the whole cost of the proceedings, including a
                reasonable attorney’s fee, to be fixed by the Commission.

                B. Where the Commission finds that an employer or insurer has
                delayed payment without reasonable grounds, it may assess against
                the employer or insurer the whole cost of the proceedings,
                including a reasonable attorney’s fee to be fixed by the
                Commission. In such a case where an attorney’s fee is awarded
                against the employer or insurer, the Commission shall calculate
                and add to any award made to the claimant interest at the judgment
                rate, as set forth in § 6.1-330.54, on the benefits accrued from the
                date the Commission determined the award should have been paid
                through the date of the award.

                                                -4-
       The Guaranty Fund requested review of the deputy commissioner’s opinion by the full

commission. Before the full commission reviewed the case, the Guaranty Fund paid Dr. Zhang

$71,725.85, and stated in a letter to Dr. Zhang that “no further payments are due.”

       The commission issued its review opinion on February 28, 2007, affirming in part,

reversing in part, and vacating the assessment of penalties against the Guaranty Fund. As to the

assessment of penalties, the commission held:

               However, the Commission may not assess a penalty against the
               [Guaranty] Fund. The Commission has previously ruled that
               attorney fees cannot be assessed against the Guaranty Fund and we
               find no reasons to distinguish precedence. In Quinn v. Flowers
               Transport, Inc., VWC File No. 197-02-82 (September 17, 2002),
               the Commission, referring to the Guaranty Fund, stated: “No
               penalty can be assessed against the Fund.” Also, in Price v.
               Johnston Memorial Hospital, VWC File No. 207-09-52 (January 4,
               2005), the Commission noted that the Guaranty Fund was a
               creature of statute to pay claims of insolvent insurers, analogized it
               to the Uninsured Employer’s Fund, and determined that penalties
               pursuant to Code [§] 65.2-713 could not be assessed against the
               Guaranty Fund.

       The commission further found that the Guaranty Fund had “waived their right to review

and reduce Dr. Zhang’s medical bills in accordance with Code § 65.2-605 by failing to raise such

defense to the amount [at the May 2006 hearing] and by failing to appeal the Deputy

Commissioner’s specific findings in his June 2006 Opinion.” 5 However, the commission

determined that, in ordering the Guaranty Fund to pay Dr. Zhang, the deputy commissioner had

“exceeded his statutory jurisdiction.” The commission ruled

               [t]hat part of the June Opinion which exceeds the Commission’s
               authority is unenforceable. Thus, we will utilize our equitable
               powers grounded in the doctrine of imposition to correct this
               mistake.

                  It is clear that, if Dr. Zhang has not received payment for
               services rendered and addressed in the June Opinion, the employer

       5
         The Guaranty Fund did not appeal this finding of the commission, so that issue is not
before us on appeal.
                                             -5-
               is responsible for payment of such. However, if Dr. Zhang has
               already been paid, we do not have the authority to order a third
               party reimbursement and any payment to Dr. Zhang above the
               $95,030.00 would constitute an inappropriate double payment. We
               find that ordering double payment to the medical provider, in the
               expectation that the provider might accept the payment and make a
               refund to the third party, is no different than ordering a direct
               payment to the third party. The Commission does not have the
               authority to do indirectly what it cannot do directly and, in such
               circumstances, the parties are left to the appropriate civil remedies.

       This appeal follows.

                                           ANALYSIS

       This appeal does not present a case of conflicting evidence or a dispute concerning the

commission’s findings of fact. The issues before us are purely issues of law. On appeal, we are

“not bound by the legal determinations made by the commission. ‘We must inquire to determine

if the correct legal conclusion has been reached.’” Cibula v. Allied Fibers & Plastics, 14

Va. App. 319, 324, 416 S.E.2d 708, 711 (1992) (quoting City of Norfolk v. Bennett, 205 Va.

877, 880, 140 S.E.2d 655, 657 (1965)), aff’d, 245 Va. 337, 428 S.E.2d 905 (1993).

                                  Jurisdiction to Order Payment

       Claimant argues that the commission erred in “concluding it did not have jurisdiction to

order the employer to pay medical expenses to the health care provider in a dispute between an

employer, an employee, and a health care provider.” 6

       The commission ruled that the deputy commissioner’s order of payment to Dr. Zhang

both “exceeded his statutory jurisdiction” and “exceeded the Commission’s authority.” It seems

that the commission erroneously equated the legal concept of “jurisdiction” with “authority.”

Essentially, the commission ruled that it could entertain a collateral attack on the deputy



       6
         Claimant also argues that the commission’s decision was a “retroactive award” and
“deprived claimant of a vested property interest.” Because we rule in claimant’s favor on the
other issues before us, we need not reach these arguments on appeal.
                                               -6-
commissioner’s June 2006 opinion because the deputy commissioner had no jurisdiction to order

payments to Dr. Zhang.

        A review of our case law reveals that “jurisdiction” and “authority” are two very different

concepts. In Nelson v. Warden, 262 Va. 276, 552 S.E.2d 73 (2001), the Supreme Court of

Virginia outlined the “‘necessary distinction to be drawn . . . between the power of a court to

adjudicate a specified class of cases, commonly known as subject matter jurisdiction, and the

authority of a court to exercise that power in a particular case.’” Nelson, 262 Va. at 281, 552

S.E.2d at 75 (quoting David Moore v. Commonwealth, 259 Va. 431, 437, 527 S.E.2d 406, 409

(2000)).

        “‘[S]ubject matter jurisdiction is granted by constitution or statute.’” Id. Subject matter

jurisdiction allows the court or the commission to adjudicate the matter in controversy. Bd. of

Supervisors v. Bd. of Zoning Appeals, 271 Va. 336, 347, 626 S.E.2d 374, 381 (2006). “‘[I]t

cannot be waived,’” and “‘any judgment rendered without it is void ab initio.’” Nelson, 262 Va.

at 281, 552 S.E.2d at 75 (quoting David Moore, 259 Va. at 437, 527 S.E.2d at 409). “‘[L]ack of

subject matter jurisdiction may be raised at any time, in any manner, before any court, or by the

court itself.’” Id.

        In contrast, “[a] court’s authority to exercise its subject matter jurisdiction over a case

may be restricted by a failure to comply with statutory requirements that are mandatory in nature

and, thus, are prerequisite to a court’s lawful exercise of that jurisdiction.” Dennis Moore v.

Commonwealth, 259 Va. 405, 409, 527 S.E.2d 415, 417 (2000). Failure to timely and properly

object to a lack of authority waives any later challenge; any actions taken without authority are

merely “voidable and not void.” Nelson, 262 Va. at 284-85, 552 S.E.2d at 77. Voidable actions

become void only upon subsequent direct review, after the appropriate objection has been raised

by a party to the proceedings. Id. at 285, 552 S.E.2d at 78. “A voidable judgment is subject to

                                                 -7-
direct attack at any time before the judgment becomes final, but is not subject to collateral

attack.” Pope v. Commonwealth, 37 Va. App. 451, 456, 559 S.E.2d 388, 390 (2002).

       Here, the deputy commissioner had before him a claim, filed by a claimant, against an

employer and its insurer, for payment of medical treatment for injuries sustained as a result of a

compensable work accident. That issue is directly within the subject matter jurisdiction of the

commission. “All questions arising under [the Workers’ Compensation Act] . . . shall be

determined by the Commission . . . .” Code § 65.2-700. “This grant of subject matter

jurisdiction includes the authority of the Commission to enforce its orders and to resolve

coverage and payment disputes.” Bogle Development Co. v. Buie, 250 Va. 431, 434, 463 S.E.2d

467, 468 (1995). Code § 65.2-714(A) provides the commission exclusive jurisdiction over all

disputes concerning payment of the fees or charges of physicians and hospitals. Moreover, an

employer has a statutory duty to provide an employee with free medical care related to a

compensable injury. Code § 65.2-603(A).

       “[T]he commission had before it a dispute among a medical care provider, an employee,

and an employer concerning whether the employer was responsible for payment of [claimant’s]

medical expenses. Such a dispute falls squarely within the commission’s sole jurisdiction

provided for under the Act.” Combustion Eng’g v. Lafon, 22 Va. App. 235, 238-39, 468 S.E.2d

698, 699 (1996). Thus, we find that the commission erred in finding that the deputy

commissioner did not have the jurisdiction to order the Guaranty Fund to pay Dr. Zhang’s bill

for claimant’s medical treatment.

       Further, the commission’s ruling that the deputy commissioner’s order “exceeded the

Commission’s authority” was not an issue that the commission could consider in a collateral

attack; this matter had to be raised on direct appeal from the deputy commissioner’s June 2006

opinion. Epps v. Commonwealth, 47 Va. App. 687, 702, 626 S.E.2d 912, 919 (2006) (en banc)

                                                -8-
(“If the court lacks authority to exercise its subject matter jurisdiction, the order would be

erroneous or voidable, not void, and appellant’s remedy would be a direct appeal.” (citation

omitted)), aff’d, 273 Va. 410, 641 S.E.2d 77 (2007). Because the Guaranty Fund failed to appeal

the decision of the deputy commissioner to the full commission within twenty days, that decision

became final. This precludes the commission’s consideration of whether the deputy

commissioner acted beyond the scope of his authority in ordering the payment to Dr. Zhang.

                                       Doctrine of Imposition

       Claimant contends that the commission erred in using the doctrine of imposition to

review a decision of the deputy commissioner that was not appealed by the Guaranty Fund.

       In addition to ruling on the “jurisdiction” and “authority” of the deputy commissioner to

order the payment to Dr. Zhang, the commission also invoked the doctrine of imposition to

“correct this mistake.” We must consider whether the commission can use the doctrine of

imposition to reach the merits of an unappealed opinion of the deputy commissioner.

       “Application for full commission review of an award must be made within twenty days of

its entry. Absent clear and convincing evidence of fraud, misrepresentation, mutual mistake, or

imposition the commission has no authority to vacate an award from which no party sought

timely review.” Butler v. City of Va. Beach, 22 Va. App. 601, 604, 471 S.E.2d 830, 832 (1996)

(citation omitted). Here, there are no allegations of fraud, misrepresentation or mutual mistake.

The commission considered only the doctrine of imposition.

               “Within the principles established by statutes and the decisions
               construing them, the commission has ‘jurisdiction to do full and
               complete justice in each case.’ From that principle has developed
               the concept known as ‘imposition,’ which empowers the
               commission in appropriate cases to render decisions based on
               justice shown by the total circumstances even though no fraud,
               mistake or concealment has been shown.”




                                                -9-
Odom v. Red Lobster # 235, 20 Va. App. 228, 234, 456 S.E.2d 140, 143 (1995) (quoting Avon

Products, Inc. v. Ross, 14 Va. App. 1, 7, 415 S.E.2d 225, 228 (1992)). “The application of the

doctrine, however, requires a threshold showing of unfairness.” Tuck v. Goodyear Tire &

Rubber Co., 47 Va. App. 276, 285, 623 S.E.2d 433, 437 (2005). “[T]he doctrine of imposition

focuses on a party’s or the commission’s ‘use of superior knowledge [of, or] experience with[,]

the . . . Act or use of economic leverage, which results in an unjust deprivation’ of benefits under

the Act or an unjust application of the Act’s provisions.” Overhead Door Co. v. Lewis, 29

Va. App. 52, 60, 509 S.E.2d 535, 538-39 (1999) (quoting Butler, 22 Va. App. at 605, 471 S.E.2d

at 832).

       The key to meeting this threshold showing of unfairness is for the party arguing in favor

of using the doctrine of imposition to show “a series of acts” by the opposing party or the

commission upon which the party “naturally and reasonably relies to his or her detriment.”

Butler, 22 Va. App. at 605, 471 S.E.2d at 832. Thus, “the issue is whether under the totality of

the circumstances shown, the actions of [one party] created an imposition on the commission and

the [other party] which empowered the commission ‘do full and complete justice.’” Ross, 14

Va. App. at 8, 415 S.E.2d at 229.

       “[T]he doctrine of imposition does not apply where a [party’s] acts are consistent with an

endeavor to comply with the [Workers’ Compensation] Act.” Odom, 20 Va. App. at 234, 456

S.E.2d at 143.

                 Imposition cannot be invoked to reward a party who blatantly
                 contravenes the Act’s requirements . . . . The commission’s
                 “adoption of . . . rules [for carrying out the provisions of the Act] is
                 a legislative act, and the enactment is binding in law upon the
                 parties and the Commission as well.” [Sargent Electric Co. v.]
                 Woodall, 228 Va. [419,] 424, 323 S.E.2d [102,] 105 [(1984)].
                 Thus, the commission’s authority to do full and complete justice
                 must be exercised “within the principles established by statutes and
                 rules construing them.” [] Ross, 14 Va. App. [at] 7, 415 S.E.2d
                 [at] 228 [].
                                                  -10-
Uninsured Employer’s Fund v. Peters, 43 Va. App. 731, 741, 601 S.E.2d 687, 692 (2004) (first

alteration in original).

          In Lewis, 29 Va. App. 52, 509 S.E.2d 535, we refused to apply the doctrine of imposition

to allow an employer to terminate an award of benefits where the claimant had negotiated and

received a settlement for a third-party claim relating to his injury without first consulting with

employer. Lewis, 29 Va. App. at 60-61, 509 S.E.2d at 539. We held that the doctrine was

“inapplicable because the benefit accruing to the claimant in this case did not result from his use

of superior knowledge or experience with the Act or economic leverage.” Id. at 61, 509 S.E.2d

at 539.

          Similarly, here, any injustice or unfairness that arises from the possibility of a “double

payment” does not result from claimant’s “use of superior knowledge or experience with the

Act” or any “economic leverage.” Instead, the injustice, if any, arose from the Guaranty Fund’s

own act: the failure to timely appeal the June 2006 opinion of the deputy commissioner. We

will not allow the commission to use the doctrine of imposition in favor of a party who has

created the very injustice the doctrine seeks to remedy. See Butler, 22 Va. App. at 605, 471

S.E.2d at 832 (refusing to apply the doctrine of imposition where the claimant failed to seek

timely review of an award and the error the claimant complained of resulted from an agreement

drafted and signed by the claimant). Therefore, we find that the commission erred in using the

doctrine of imposition to consider the merits of the deputy commissioner’s June 2006 opinion.

We reverse the commission’s decision to vacate the deputy commissioner’s order as to medical

payments. 7



          7
          Because the Guaranty Fund did not seek direct review of the deputy commissioner’s
June 2006 opinion, the merits of that decision, namely whether the commission has the authority
to order the Guaranty Fund to pay a health care provider a sum that has already been paid by a
third-party insurer, are not before us on appeal.

                                                  -11-
                               Penalties Against the Guaranty Fund

       Claimant maintains that the commission erred in determining “that attorney’s fees for

unreasonable defense could not be assessed against” the Guaranty Fund. We agree.

       The commission determined that it “may not assess a penalty against the [Guaranty]

Fund.” For this proposition, the commission relies on two unpublished opinions of the

commission, Quinn v. Flowers Transport, Inc., VWC File No. 197-02-82 (September 17, 2002),

and Price v. Johnston Memorial Hospital, VWC File No. 207-09-52 (January 4, 2005). Both of

those opinions point to other unpublished opinions of the commission, some dealing with the

Uninsured Employer’s Fund. None of these opinions cite to a statute, an opinion of the Court of

Appeals, or an opinion of the Supreme Court in support of the rationale that the commission

cannot assess fees against either the Guaranty Fund or the Uninsured Employer’s Fund; indeed,

we cannot find support for this proposition in our case law or in any of the governing statutes.

       We are not bound by the commission’s legal analysis in this or prior cases. B.P. Solar &

Ace Am. Ins. Co. v. Jones, 49 Va. App. 322, 327 n.3, 641 S.E.2d 124, 126 n.3 (2007) (holding

that we are not bound to consider prior decisions of the commission).

       The legislature created the Guaranty Fund

               to provide for payments of “financial loss to claimants or
               policyholders resulting from the insolvency of an insurer.” The
               fund is not a financial obligation of the Commonwealth, but rather
               is financed through the rates and premiums charged for insurance
               policies in this Commonwealth. Code § 38.2-1606 provides that
               the Guaranty Fund “shall pay the full amount of any covered claim
               arising out of a worker’s compensation policy.”

Franklin Mortg. Corp. v. Walker, 6 Va. App. 108, 115, 367 S.E.2d 191, 195 (1988) (en banc).

“Establishment of the [Guaranty Fund] affords a mechanism for the timely payment of

appropriate claims to avoid financial loss to certain classes of people.” Virginia Property &




                                               -12-
Casualty Ins. Guaranty Assoc. v. International Ins. Co., 238 Va. 702, 705, 385 S.E.2d 614, 616

(1989).

          Code § 38.2-1606(A)(2) provides that the Guaranty Fund shall “[b]e deemed the insurer

to the extent of the insolvent insurer’s obligation on the covered claims and to that extent shall

have all the rights, duties, and obligations of the insolvent insurer as if the insurer had not

become insolvent.” (Emphasis added). In cases involving workers’ compensation claims, the

Guaranty Fund has the same duty to abide by the rules and procedures set forth in the Act as

would the insolvent insurer. When the Guaranty Fund acts in contravention to these rules and

procedures, we see no principled reason, nor can we conceive of any public policy, why the

Guaranty Fund should not be subject to the same penalties and consequences as would the

insolvent insurer. 8 Thus, we find that the commission erred in ruling that penalties can never be

assessed against the Guaranty Fund.

          Because the commission did not consider whether the penalty assessed against the

Guaranty Fund in this particular case was proper, we remand that issue to the commission to

determine whether, given the circumstances, the deputy commissioner erred in ordering the

Guaranty Fund to pay attorney’s fees to claimant under Code § 65.2-713. See Va. Polytechnic

Inst. v. Posada, 47 Va. App. 150, 160-61, 622 S.E.2d 762, 768 (2005) (awarding attorney’s fees

to claimant where employer unreasonably defended its failure to pay claimant’s medical

expenses).

                                          CONCLUSION

          We find that the commission erred in ruling that the deputy commissioner lacked the

jurisdiction to order the Guaranty Fund to attempt to pay Dr. Zhang. We hold that, because the


          8
        Code § 65.2-524 suggests that even the Commonwealth is subject to penalties for not
complying with the Act, except in very limited circumstances.

                                                -13-
Guaranty Fund did not seek direct review of the deputy commissioner’s June 2006 opinion, the

commission could not reach the merits of that decision under the doctrine of imposition. Finally,

we determine that the Guaranty Fund, like any other insurer, is subject to the penalty provisions

set forth in the Act and we find that the commission erred in ruling that a penalty could never be

assessed against the Guaranty Fund. We reverse the decision of the commission, and remand the

case for a determination of whether the deputy commissioner properly assessed attorney’s fees

and costs against the Guaranty Fund under Code § 65.2-713.

                                                                          Reversed and remanded.




                                              -14-